June 8 (Bloomberg) -- Bank of America Corp.’s effort with
Societe Generale SA to reverse New York’s approval of MBIA
Inc.’s 2009 restructuring is being considered by a judge after
the conclusion of a four-week trial over the transaction.

Lawyers with Sullivan & Cromwell LLP and Kasowitz Benson
Torres & Friedman LLP gave final arguments before New York State
Supreme Court Justice Barbara Kapnick in Manhattan, capping a
hearing that began last month over the decision by former New
York Insurance Department Superintendent Eric Dinallo to approve
the bond insurer’s restructuring.

Kapnick said it’s going to “take a while” to review the
evidence and make a ruling.

“There’s a lot of stuff to go through,” Kapnick said.

Kapnick is considering claims by the banks that the state’s
approval was based on inaccurate and incomplete information and
should be annulled under state insurance laws. Lawyers for banks
argued during the trial that the approval was done in secret and
based on a rushed, flawed analysis.

The banks claim the restructuring exposed them to losses as
policyholders by transferring $5 billion in assets out of an
MBIA unit that issued financial guaranty insurance policies into
a new division that guaranteed municipal bonds.

Kapnick heard arguments over a four-week period from the
banks, MBIA and New York Attorney General Eric Schneiderman’s
office, which represents the state. There was no jury, and
witnesses weren’t called.

Marc Kasowitz, a lawyer with Kasowitz Benson who represents
MBIA, said the approval was based on a yearlong state
investigation that included weeks of on-site review at the
company’s headquarters.

The banks rely on “distortions and misrepresentations”
about the process and haven’t met their burden of showing that
Dinallo’s approval was arbitrary and capricious, Kasowitz said.
The decision was rational and within the scope of the
department’s authority, he argued.

David Holgado, a lawyer with the attorney general’s office,
argued during the trial that the review was based on a thorough
investigation by the insurance department, which analyzed
investments insured by MBIA and conducted interviews with
company employees.

Robert Giuffra, a lawyer with Sullivan & Cromwell who
represents the banks, told the judge during his closing argument
yesterday that the case is important to all current and future
holders of insurance policies in the state of New York, whether
they are banks, homeowners or owners of student loans that have
been securitized into bonds.

“This time it’s the banks,” Giuffra said. “Next time it
will be hurricane victims or victims of a toxic drug.”

The case is ABN Amro Bank v. Dinallo, 601846-2009, New York
State Supreme Court, New York County (Manhattan).

For more, click here.

Deals

Lloyds Sells Australian Loans to Morgan Stanley, Blackstone

Lloyds Banking Group Plc agreed to sell 809 million pounds
($1.25 billion) of Australian corporate real estate loans to a
Morgan Stanley and Blackstone Group LP joint venture for about
388 million pounds in cash.

Minter Ellison advised Lloyds International while Freehills
advised the buyer, Minter Ellison said in a statement.

The Minter Ellison team included partners Victoria
Mathewson, corporate; John Elias, finance; Daniel Scotti,
corporate; Lindsay Powers, dispute resolution; and David
McElhone, real estate. John Nestel was the lead lawyer for
Freehills, Minter Ellison said.

Lloyds will use the proceeds from the deal to repay debt,
the London-based company said in a statement yesterday. The
loans generated losses of 183 million pounds last year, said
Lloyds, the U.K.’s second-biggest government-aided bank.

“This transaction further de-risks the Australian
business,” removing 92 percent of the non-performing real
estate loans, Dave Smith, chief executive officer of Lloyds
International Pty Ltd., said in the statement. Smith’s company
is a Sydney-based unit operating in Australia and New Zealand.

The transaction is expected to be completed in the third
quarter, Lloyds said.

For more, click here.

Firm News

Chicago Law Firm Opens With Majority Female Ownership

Scharf Banks Marmor LLC, a law firm majority-owned by women
that serves corporate clients, opened in Chicago. Stephanie A.
Scharf, Theodore Banks and Sarah R. Marmor are the firm’s
principals.

The firm, with 10 attorneys, represents companies in
complex litigation, compliance and corporate governance,
employment, life sciences and antitrust, according to a
statement.

“We have the same focus on getting the right results for
our clients as when we were practicing in large firms,” Scharf
said in a statement. “Happily, we can provide a high quality of
service at sharply lower costs.”

The principals most recently practiced at the Chicago
office of New York firm Schoeman Updike & Kaufman LLP, according
to the statement. Scharf and Marmor are former partners with
Jenner & Block LLP and Kirkland & Ellis LLP, while Banks was
associate general counsel and chief counsel-global compliance at
Kraft Foods Global Inc.

Moves

Jackson Lewis Adds Dallas Partner Michael Mirarchi

Jackson Lewis LLP hired Michael J. Mirarchi in the firm’s
Dallas office as partner. He joins from Mirarchi Management
Group, a consulting firm he founded in 1992.

Mirarchi developed his interest in litigation prevention
while in charge of employment litigation at Frito-Lay Inc.,
where he defended the company from claims of discrimination,
sexual harassment and wrongful termination, the firm said.

Jackson Lewis has been expanding its presence in Texas. The
firm opened an Austin office in October. Jackson Lewis has more
than 700 attorneys in 49 locations nationwide.

Employment Litigation Partner Joins Venable in Los Angeles

Venable LLP said that Daniel P. Hoffer, formerly with
Kellman Hoffer LLP in Manhattan Beach, California, joined the
law firm’s Los Angeles office as a partner in the labor and
employment practice group.

“Our clients will have a great opportunity to work with
counsel who has substantial experience with the most pressing
issues facing California employers today, including privacy and
data security, trade secret protection and class action
defense,” Douglas Emhoff, partner-in-charge of the Los Angeles
office, said in a statement.

Hoffer has litigated hundreds of lawsuits in state and
federal courts and before such administrative agencies as the
Division of Labor Standards Enforcement, the Department of Fair
Employment and Housing, and the Equal Employment Opportunity
Commission.

Venable has more than 500 lawyers in seven offices in
Washington, California, Maryland, New York and Virginia.

Verdicts & Settlement

Bear Stearns Investors Settle Lawsuit for $275 Million

JPMorgan Chase & Co.’s Bear Stearns unit agreed to a
proposed $275 million cash settlement of a consolidated federal
lawsuit filed by investors who lost money from 2006 to 2008.

Under the agreement, which requires approval by a judge,
the money, minus legal fees, will go to shareholders who claimed
the company issued “materially false and misleading
statements” about financial results, according to papers filed
yesterday in Manhattan federal court. The legal fees requested
haven’t yet been specified.

Company officials “continue to deny any wrongdoing” in
the case, according to a stipulation filed with the court. Among
the defendants are former Bear Stearns executives and directors
including James Cayne, Alan Schwartz, Warren Spector, Samuel
Molinaro and Alan Greenberg.

The case is In re The Bear Stearns Cos. Securities,
Derivative and ERISA Litigation, 08-mdl-1963 and 08-cv-2793,
U.S. District Court, Southern District of New York (Manhattan).